Stock Investment Strategy

If you're going to invest in stocks, you need a stock investment strategy.

As simple as that sounds, it's not. There's an infinite amount of strategies that one can employ. But when you're first starting out, here are things you should consider:

Initial Investment Amount - investing, unlike trading, is done with periodic smaller initial investments and re-investments. In trading, you take a larger sum of money, buy, and sell when a price target is achieved. A stock investment strategy is more like a belief in a company, regardless of price.

The last thing you want to do when investing is buy your whole position all at once. If you time it incorrectly, you may never recover. To offset poor market timing, the investor will make strategic, periodic investments into a position. Similar to dollar cost averaging in a 401k plan.

Both the trader and investor tend to struggle over the decision of what to buy. And both the trader and the investor are faced with the decision when to buy. The difference between the strategies is when to sell.

Superperformance stocks: An investment strategy for the individual investor based on the 4-year political cycle

As an investor, you believe in management, you believe in the company, and you believe that they're going to be around for a long time. So the thought of selling generally doesn't impact the investor.

The trader has 2 more decisions other than what to buy and when to get in; 1) when to get out if they're right and 2) when to get out when they're wrong (money management). This is what trading is all about. If you think you're investing, and you're doing the same thing, then understand you are a trader.



So let's focus on a stock investment strategy; The next question is how many stocks do you buy?

Now you're looking at how much money you have to invest. The nice thing about investing is that it's a long term process. So don't rush it. You may feel compelled to make money now, but don't be. The objective of investing is positioning in good companies over time - not making money now and getting out - that's trading.

Next question is how many stocks to get into. These questions are tough to answer in the general format of a blog. They require professional help. See a certified financial planner. Especially if you're looking to invest in stocks and haven't thought about retirement and insurance, and other needs you may have. Best to cover all your bases before you get into the stock investing game.

With all that being said, you are probably still looking for a stock investment strategy. I've been investing and trading for over 2+ decades and have put together a stock investment strategy I call the Triangle of Wealth stock investment strategy. It's free - it's one of the free reports we give away at my financial newsletter website - http://www.stockbarometer.com/ . Just click on the free reports link and sign up there.


The strategy is very simple, but I'm sure it has some concepts in it that you haven't heard before. Simple things you can do to focus your investment dollars. And some rules to help you prevent the mistakes most people make.